The recently-announced speculation tax is causing concern locally, with officials advocating to ensure it is not implemented in the Columbia Valley.
The tax was announced by Finance Minister Carole James in the 2018 provincial budget February 20th. The Province says the annual speculation tax targets foreign and domestic speculators in B.C. who have removed units from B.C.’s long-term housing stock. The objective is to target homes not occupied by long-term rentals or are owner-occupied. The tax is being implemented in Metro Vancouver, the Fraser Valley, Capital and Nanaimo Regional Districts, and the municipalities of Kelowna and West Kelowna.
In the 2018 tax year, the rate will be $5 per $1,000 of assessed value, increasing to $20 per $1,000 of assessed value in 2019. Specific technical details of the tax have not been released yet.
The Regional District of East Kootenay (RDEK) released a statement raising concern that the tax not only targets speculators, but secondary homeowners intent on investing time and money in their secondary residence communities.
“The new tax uses a broad-brush to paint all second-property owners as speculators. Our Board wants to stress to the Province that in our area, our second-homeowners are a valued and important part of our communities and we are gravely concerned about the impact this tax could have should it be expanded,” said RDEK Chair Rob Gay in a press release.
The RDEK board is calling on the Province to provide assurances the tax will not be expanded to the RDEK.
“Our concern isn’t just about the potential future impacts. We believe there are already negative impacts on regions not originally included in the tax, particularly because of the uncertainty it has created,” added Mr. Gay. “Recreational property investors may be hesitant to invest in our region if there is no assurance that the Province won’t be expanding the tax further.”
Susan Clovechok, Columbia Valley Chamber of Commerce executive director, says they are very concerned about the potential impact in the Valley should the Province roll out the tax here, but are actively working to ensure it does not.
“We’re working with our colleagues across the province to advocate against this tax in its current form,” said Mrs. Clovechok. “The prospect of the speculation tax threatens our communities’ social and economic wellbeing. Therefore the Chamber is committed to working with our colleagues around the province to advocate against this tax and recommend to government better ways to solve the issue of affordable housing.”
When asked what they would like to see changed, Mrs. Clovechok said they will be looking at better options for the tax, emphasizing, “We certainly don’t think Canadians should be penalized.”
Oftentimes, she said, secondary home ownership is a gateway to moving here full-time, a key goal of the Resident Attraction and Retention Strategy. And secondary homeowners contribute more than just property taxes to the Valley, she added.
“We wouldn’t have the Westside Legacy Trail, or the community centre, or even the Whiteway, without support and investment from our secondary homeowners,” said Mrs. Clovechok.
Invermere realtor Scott Wallace is strongly opposed to the tax, saying it does not even target speculators, as they get in and out of a property too fast for a property tax to have a major impact, and instead hurts secondary homeowners.
“There’s an inherent unfairness in the tax, to hit people who are nonresidents in Canada,” said Mr. Wallace. “The NDP has the idea they can micromanage things to fix every little social ill, including the lack of tenancies.”
Mr. Wallace has seen the tax cause apprehension in the Valley.
“It’s definitely making people nervous here. A large percentage of our owners are nonresidents here, and we depend on them. Our economy is pretty much tourism driven now. If we keep hitting Albertans on the head with more and more costs, eventually they’re going to say to heck with you guys,” Mr. Wallace commented. “We’re pretty lucky here, we’ve got a pristine place. But we can’t keep charging admission.”
Even District of Invermere Mayor Gerry Taft, who ran locally in the last provincial election for the NDP, agrees the speculation tax is a bad idea, stating, “This tax doesn’t seem completely fair.”
He said the District of Invermere is also advocating against this tax, alongside the RDEK.
The silver lining of the new tax, Mr. Taft suggests, might be that Albertans who may have been considering buying secondary homes in somewhere like Kelowna, will now consider the Columbia Valley instead.